Using a combination of Monte-Carlo simulations and experimental measurements we have designed a small animal MR compatible PET (McPET) scanner for simultaneous PET and MR imaging of mice and rats in vivo. The scanner consists of one ring of 480 LSO crystals arranged in 3 layers with 160 crystals per layer. The crystal dimensions are 2 × 3 × 7.5 mm3. This was based on a target resolution of 2.5 mm and simulations showing that a depth of 7.5 mm was sufficient to provide this resolution across the desired field of view. The system diameter of 11.2 cm is large enough to accommodate the animal positioned inside a stereotactic frame. Each crystal will be coupled through 2 mm diameter optical fibers to multi-channel PMT's which reside outside the main magnetic field. Through 50 cm of optical fiber, a photopeak is clearly seen and the measured energy resolution is 25%. Prototype optical fiber connectors have been tested to increase the flexibility of the system and result in a light loss of only 6%. The proposed system will have adequate resolution and sensitivity for a number of applications in small animals and will be the first practical device for simultaneous in vivo imaging with PET and MR.